Correlation Between Calibre Mining and Toronto Dominion

Can any of the company-specific risk be diversified away by investing in both Calibre Mining and Toronto Dominion at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Calibre Mining and Toronto Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calibre Mining Corp and Toronto Dominion Bank, you can compare the effects of market volatilities on Calibre Mining and Toronto Dominion and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Calibre Mining with a short position of Toronto Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Toronto Dominion.

Diversification Opportunities for Calibre Mining and Toronto Dominion

0.0

Correlation Coefficient

Calibre Mining  Toronto Dominion

Pay attention - limited upside

The 3 months correlation between Calibre and Toronto is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Toronto Dominion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toronto Dominion Bank and Calibre Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Calibre Mining Corp are associated (or correlated) with Toronto Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toronto Dominion Bank has no effect on the direction of Calibre Mining i.e., Calibre Mining and Toronto Dominion go up and down completely randomly.

Pair Corralation between Calibre Mining and Toronto Dominion

Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the Toronto Dominion. In addition to that, Calibre Mining is 3.65 times more volatile than Toronto Dominion Bank. It trades about -0.18 of its total potential returns per unit of risk. Toronto Dominion Bank is currently generating about 0.18 per unit of volatility. If you would invest  2,430  in Toronto Dominion Bank on October 8, 2024 and sell it today you would earn a total of  44.00  from holding Toronto Dominion Bank or generate 1.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	72.22%
Values	Daily Returns

Calibre Mining Corp  vs.  Toronto Dominion Bank

Calibre Mining Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Toronto Dominion Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Toronto Dominion Bank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Toronto Dominion is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calibre Mining and Toronto Dominion

The main advantage of trading using opposite Calibre Mining and Toronto Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining position performs unexpectedly, Toronto Dominion can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Toronto Dominion will offset losses from the drop in Toronto Dominion's long position.

The idea behind Calibre Mining Corp and Toronto Dominion Bank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.